Socialists For Small Government?

From Chris Dillow's Stumbling and Mumbling blog:

Shrink the state: a leftist aim, April 17th 2009

David Semple thinks the left should join American tea parties, which protest against high taxes. I think I agree. The desire to shrink the state should be a leftist aim. I say so for four reasons.

1. Big government cannot be redistributive government. If the state is raising 40% of GDP in taxes, it must tax the worst off, simply because the rich, even in the UK and US, aren’t that rich or plentiful.

This pdf gives us the numbers. Table 2 shows that the tax system - leaving aside benefits - actually adds to inequality. This is because direct taxes cut the Gini coefficient by 4 percentage points, but indirect taxes add 5 points to it. And table 21 shows that the poorest fifth of households with children pay a higher proportion of their income in taxes than the richest 10%: 37.2% against 33%.

2. A big state hurts the worst off. Right-wing nut jobs might pose as victims of “ZaNuLabour.” But whether we look at Purnell’s welfare plans, repressive anti-immigration laws or the policing of protests, it is ordinary people who are the real victims of an overly powerful state: newspaper sellers, poor foreigners, the unemployed and ill. The left should be on their side.

3. When the state has lots of power, there’ll be a big fight to control it. And it’s the rich and powerful that win such fights. Why do you think banks get big bail-outs whilst ordinary workers are flung onto the dole with little compensation?

4. Belief in big government rests upon the notion that there’s an elite of leaders which has the wisdom and know-how to manage our affairs from the top-down; this is why New Labour found common cause with corporate bosses - both share the same ideology. But it is an utterly anti-egalitarian notion. It is also utterly wrong.

A Free Market Anti-Capitalist Writes...

Sometimes the gap between rhetoric and reality is unbridgeable ie 1956 Soviet tanks move into Hungary to save the people from themselves...

When the Chinese Communist leader Chou Enlai was asked in the late 1960s what he thought of the impact of the French Revolution, he said “It is too early to say.” Looking at the current economic crisis which has enveloped the capitalist world in recent weeks, most notably the so-called ‘Anglo-Saxon’ ones (although anyone who has actually perused the history of Anglo-Saxon England would surmise that the pre-1066 equivalents of ‘short-sellers’, ‘hedge-funders’ and other speculators would have been strung up from the nearest tree ages ago), no-one can with certainty predict the future. All that can be said with certainty is that something of world-historical proportions has occurred.

With $700bn promised by the Bush Administration, Treasury, Federal Reserve and Congress to prop up the US financial system, it might be surmised that the economic system we have lived under since the 1980s has been saved. However, as no one outside the most far-out Marxist sects expected a crisis of this magnitude to occur, no one really knows if this (to sound Churchillian) is the end of the beginning, or the beginning of the end.

What I would say, putting my head on the proverbial chopping bloc, is that I think the current ‘Anglo- Saxon’ economic world-view has been discredited in the same way that the events of 1956 discredited Communism. Although Soviet tanks were sent eventually into Hungary to crush the ‘national Communist’ regime of Imre Nagy, in the same way all that money has been sent in to bail the US financial system out, no-one can pretend that the current system of finance capital can survive without the backing of the state, whatever economists, politicians and assorted big business apologists may say to try to convince us otherwise. To argue that we now live under a free market system that does not really need state handouts is to employ the same rhetorical devices, and capacity for intellectual self-delusion, as those so-called Marxists after 1956 who claimed that the Eastern Bloc was run for the benefit of the working classes.

As a free-market anti-capitalist, it would be good to think that the current crisis will make enough people realise that Big Business and Big Government are (occasionally unruly) twins who adopt ‘planning’ or ‘the market’ as an ideological ruse for pursuing extra profits and power when they need it. Although I think the use of the phrase ‘Bolshevik’ in this context is hilarious, I am encouraged by the increasing numbers of people in the US (including members of Congress) who realise that the Bush/Paulson bail-out to the banks is a form of ‘socialism’, albeit one for the rich rather than the majority. I would like to think something similar might happen on Airstrip One, but apparently we always lag behind the Americans in economic and political matters…